Scribd
Upload
4K views49 pages

MCQ Inventory Valuation LBSIM

The document contains multiple inventory valuation questions and answers. It provides details of inventory purchases and issuances by a company over time periods. It then asks questions about calculating closing inventory under FIFO and LIFO methods, accounting principles related to inventory valuation, calculating cost of goods sold using different inventory figures, effects of different inventory valuation methods, and other inventory-related concepts.

Uploaded by

Sumit Sharma
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
4K views49 pages

MCQ Inventory Valuation LBSIM

The document contains multiple inventory valuation questions and answers. It provides details of inventory purchases and issuances by a company over time periods. It then asks questions about calculating closing inventory under FIFO and LIFO methods, accounting principles related to inventory valuation, calculating cost of goods sold using different inventory figures, effects of different inventory valuation methods, and other inventory-related concepts.

Uploaded by

Sumit Sharma
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
  • FIFO Inventory Valuation
  • LIFO Inventory Valuation
  • Accounting Principles for Valuation
  • Cost of Goods Sold Calculation
  • Inventory and Sales Calculations
  • Matching Inventory Valuation Method
  • Price Influence on Inventory Methods
  • Valuation of Closing Inventory
  • Profit and Purchases Interaction
  • Interpretation of Statements Under Inflation
  • Stock Evaluation Under Price Conditions
  • Methods of Valuation in Inflationary Conditions
  • Calculation of Opening Stock
  • Effect of Overstated Closing Stock
  • Inventory Valuation Effects
  • Matching Costs with Revenue
  • Effects of Understated Closing Stock
  • Valuation of Damaged Inventory
  • Calculating Cost of Goods Sold
  • Methods for Closing Stock Valuation
  • Cost and Profit Rate Analysis
  • Invalid Statements in Inventory Accounting
  • Determining Closing Stock
  • Effect of Loss of Stock on Closing Evaluation

MCQ

INVENTORY
VALUATION
X ltd. has furnished the following details
Date Particulars Units Rate (Rs.)
1 O.S. 100 1.75
5 Purchased 150 1.5
9 Issued 200
10 Purchased 300 1.6
15 Issued 250
Closing stock as Per FIFO
a.Rs.170. c. Rs.150
b.Rs.160 d. Rs.180
X ltd. has furnished the following details
Date Particulars Units Rate (Rs.)
1 O.S. 100 1.75
5 Purchased 150 1.5
9 Issued 200
10 Purchased 300 1.6
15 Issued 250
Closing stock as Per FIFO
a.Rs.170. c. Rs.150
b.Rs.160 d. Rs.180
X ltd. has furnished the following details
Date Particulars Units Rate (Rs.)
1 O.S. 100 1.75
5 Purchased 150 1.5
9 Issued 200
10 Purchased 300 1.6
15 Issued 250
Closing stock as Per LIFO
a.Rs.172.50 c. Rs.150
b.Rs.225 d. Rs.167.50
X ltd. has furnished the following details
Date Particulars Units Rate (Rs.)
1 O.S. 100 1.75
5 Purchased 150 1.5
9 Issued 200
10 Purchased 300 1.6
15 Issued 250
Closing stock as Per LIFO
50X1.75=
87.50
a.Rs.172.50
50X1.60=80
c. Rs.150
b.Rs.225 d. Rs.167.50
=167.50
Inventory is valued at lower of
cost or Net Realisable value as
per the Accounting Principle of
a. Consistency
b. Conservatism
c. Matching
d. Materialism

6
Inventory is valued at lower of
cost or Net Realisable value as
per the Accounting Principle of
a. Consistency
b. Conservatism
c. Matching
d. Materialism

7
If Sales are Rs.2000 and the rate
of Profit on Cost of Goods Sold is
25% then Cost of Goods sold
would be

a. Rs.2500
b. Rs.1500
c. Rs.1800
d. Rs.1600
8
If Sales are Rs.2000 and the rate
of Profit on Cost of Goods Sold is
25% then Cost of Goods sold
would be

a. Rs.2500
b. Rs.1500
c. Rs.1800
d. Rs.1600
9
Sales Rs.400000
Opening Inventory Rs. 20000
Purchase Rs.210000
Purchase Return Rs. 5000
Closing Inventory Rs. 20000
The Cost of Goods Sold would be
a. Rs. 210000
b. Rs. 220000
c. Rs. 200000
d. Rs. 205000 10
Sales Rs.400000
Opening Inventory Rs. 20000
Purchase Rs.210000
Purchase Return Rs. 5000
Closing Inventory Rs. 20000
The Cost of Goods Sold would be
a. Rs. 210000
b. Rs. 220000
c. Rs. 200000
d. Rs. 205000 11
Which Method of Inventory Valuation
best matches the Cost of Goods Sold
and Replacement Cost

a. LIFO
b. FIFO
c. Weighted Average
d. None of the above.
12
Which Method of Inventory Valuation
best matches the Cost of Goods Sold
and Replacement Cost

a. LIFO
b. FIFO
c. Weighted Average
d. None of the above.
13
If stock at the end is more by FIFO
method than LIFO method than it is

a. Of Rising Prices
b. Of Declining Prices
c. Constant Prices
d. None of the above
14
If stock at the end is more by FIFO
method than LIFO method than it is

a. Of Rising Prices
b. Of Declining Prices
c. Constant Prices
d. None of the above
15
Purchases Rs. 400000,Operning Stock
Rs. 100000,Sales Rs.300000.
Selling Price is Cost Plus 1/3rd of Cost
The Value of Closing Inventory
would be

a. Rs. 100000
b. Rs. 200000
c. Rs. 275000
d. Rs. 225000
16
Purchases Rs. 400000,Operning Stock
Rs. 100000,Sales Rs.300000.
Selling Price is Cost Plus 1/3rd of Cost
The Value of Closing Inventory
would be
If profit is 1/3rd of
a. Rs. 100000 COGS,
b. Rs. 200000 It is 1/4th of Sales
c. Rs. 275000 CS=OS+P-COGS
d. Rs. 225000
17
Closing Stock Rs. 225000
Sales Rs.300000
Opening Stock Rs.100000
Profit is 25% of Sales
Purchases would be

a. Rs. 425000
b. Rs.275000
c. Rs.500000
d. None of the above
18
Closing Stock Rs. 225000
Sales Rs.300000
Opening Stock Rs.100000
Profit is 25% of Sales If profit is 1/4th
Purchases would be of Sales,
P=COGS+CS-
a. Rs. 425000 OS
b. Rs.275000 275000+22500-
c. Rs.500000 100000
P=Rs.400000
d. None of the above
19
Mark the True Statement
a. FIFO stock is of less Value during
inflation.
b. LIFO stock is of more Value during
inflation .
c. FIFO stock is of more Value
during
falling prices .
d. None of the above
20
Mark the True Statement
a. FIFO stock is of less Value during
inflation.
b. LIFO stock is of more Value during
inflation .
c. FIFO stock is of more Value
during
falling prices .
d. None of the above
21
If Stock at the end is more by LIFO
method than FIFO method than it is

a. Of Rising Prices
b. Of Declining Prices
c. Constant Prices
d. None of the above
22
If Stock at the end is more by LIFO
method than FIFO method than it is

a. Of Rising Prices
b. Of Declining Prices
c. Constant Prices
d. None of the above
23
Under inflationary conditions which of
the following method gives more
Value to Cost Of Goods Sold

a. FIFO
b. LIFO
c. Weighted Average Method
d. Both a & c
24
Under inflationary conditions which of
the following method gives more
Value to Cost Of Goods Sold

a. FIFO
b. LIFO
c. Weighted Average Method
d. Both a & c
25
Opening Stock is equal to

a. Sales - Closing Stock + Purchase


b. Sales-Closing Stock +Cost of Goods
sold
c. Sales +Closing Stock –Purchases
d. Sales – Cost of Goods Sold +Closing
Stock

26
Opening Stock is equal to

a. Sales - Closing Stock + Purchase


b. Sales-Closing Stock +Cost of Goods
sold
c. Sales +Closing Stock –Purchases
d. Sales – Cost of Goods Sold +Closing
Stock

27
If Closing Stock is overstated than
Gross Profit & Current Assets

a. Both would Decrease


b. Both would Increase
c. Increase in GP & Decrease in CA
d. Decrease in GP and Increase In CA
28
If Closing Stock is overstated than
Gross Profit & Current Assets

a. Both would Decrease


b. Both would Increase
c. Increase in GP & Decrease in CA
d. Decrease in GP and Increase In CA
29
Inventory valuation does not effect

a. Net income
b. Cash Flow Statement
c. Tax Liability
d. Both a & b
30
Inventory valuation does not effect

a. Net income
b. Cash Flow Statement
c. Tax Liability
d. Both a & b
31
Which method of stock valuation
Matches current cost with current
revenue

a. FIFO
b. LIFO
c. Weighted Average Method
d. Specific Identification Method
32
Which method of stock valuation
Matches current cost with current
revenue

a. FIFO
b. LIFO
c. Weighted Average Method
d. Specific Identification Method
33
If Closing stock is under
stated than

a.Current year Profit would be Understated


b. Current year Profit would be Overstated
c. Next year Profit would be Understated
d. Both b & c

34
If Closing stock is under
stated than

a.Current year Profit would be Understated


b. Current year Profit would be Overstated
c. Next year Profit would be Understated
d. Both b & c

35
Damaged inventory should
be valued at

a. Cost
b. Net Realisable Value
c. Replacement Cost
d. Current Cost

36
Damaged inventory should
be valued at

a. Cost
b. Net Realisable Value
c. Replacement Cost
d. Current Cost

37
Cost of Goods sold is equal to

a. Opening stock +Purchases –Loss of


stock +Closing Stock
b. Opening stock +Purchases +Loss of
stock +Closing Stock
c. Sales – Closing stock –Opening stock
d. Purchase +Opening Stock –Closing
Stock
38
Cost of Goods sold is equal to

a. Opening stock +Purchases –Loss of


stock +Closing Stock
b. Opening stock +Purchases +Loss of
stock +Closing Stock
c. Sales – Closing stock –Opening stock
d. Purchase +Opening Stock –Closing
Stock
39
Closing Stock is to be
valued at

a.Cost or Purchase Price which ever is


Lower
b. Cost or Market Cost which ever is Lower
c. Cost or Replacement Cost which ever is
Lower
d.None of the above
40
Closing Stock is to be
valued at

a.Cost or Purchase Price which ever is


Lower
b. Cost or Market Cost which ever is Lower
c. Cost or Replacement Cost which ever is
Lower
d.None of the above
41
Total Cost of Goods available for sale
was Rs.120000.
Total Sales were Rs.120000.
If Gross Profit rate is 1/3rd ofCost
than Closing Stock would

a. Rs. 40000
b. Rs. 30000
c. Rs. 22500
d. Rs. 20000
42
Total Cost of Goods available for sale
was Rs.120000.
Total Sales were Rs.120000.
If Gross Profit rate is 1/3rd of Cost
than Closing Stock would
I/3rd on cost means
a. Rs. 40000 1/4th on Sales
b. Rs. 30000 COGS=Rs.90000
CS=120000-90000
c. Rs. 22500
=Rs.30000
d. Rs. 20000
43
Mark the untrue Statement
a. Opening Stock is an Asset in
Balance Sheet.
b. Closing Stock is an Asset in
Balance Sheet.
c. Closing Stock is equal to Purchases
– COGS.
d. Opening Stock is equal to COGS
+Purchases.
44
Mark the untrue Statement
a. Opening Stock is an Asset in
Balance Sheet.
b. Closing Stock is an Asset in
Balance Sheet.
c. Closing Stock is equal to Purchases
– COGS.
d. Opening Stock is equal to COGS
+Purchases.
45
Sales Rs. 80000
Purchases Rs.100000
Opening Stock Rs. 20000
Profit Margin 25%
The Closing Stock would be

a. Rs.60000
b. Rs.80000
c. Rs. 36000
d. Rs.40000
Sales Rs. 80000
Purchases Rs.100000
Opening Stock Rs. 20000
Profit Margin 25%
The Closing Stock would be
COGS=75% of 80000
= Rs.60000
COGS=OS+P-CS
a. Rs.60000
20000
b. Rs.80000 +100000
c. Rs. 36000 -60000
d. Rs.40000 =60000
Sales Rs. 200000
Purchases Rs.160000
Opening Stock Rs. 80000
Profit Margin 1/3rd on COGS
Loss of Stock Rs.30000
The Closing Stock would be
a. Rs.10000
b. Rs.40000
c. Rs. 36000
d. Rs.60000
Sales Rs. 200000
Purchases Rs.160000
Opening Stock Rs. 80000
Profit Margin 1/3rd on COGS
Loss of Stock Rs.30000
The Closing Stock would be
a. Rs.10000 If profit is 1/3 rd
of
b. Rs.40000 COGS,
It is 1/4th of Sales
c. Rs. 36000
CS=OS+P-LOSS-
d. Rs.60000 COGS

You might also like